With the increase in smartphone use, more of the car transaction process is likely to take place over the phone.

That can make compliance with the Fair Credit Reporting Act more difficult. Finance managers want to be sure they protect consumers’ personal information and get their authorization to run a credit report.

Dealer lawyer Michael Charapp, co-author of the book Auto Dealer Law,says dealerships should adopt a clear, written policy on accepting telephone credit applications. His book offers 10 tips on handling credit over the phone:

1. Check with the credit reporting agencies to make sure they allow phone-in credit applications. Some don’t. Some also require dealership personnel to physically inspect customer identification before running a credit report.
2. Get customers to fax you a signed copy of a credit application as well as a copy of an acceptable ID.
3. If the customer doesn’t have access to a fax machine, clearly ask the customer if the dealership can obtain a credit report. Then write on the application that authorization was given over the phone, noting the date and time.
4. Do not use speakerphones while collecting customer information. The information must be protected.
5. Have customers complete a hard-copy credit application if they choose to finance or lease through the dealership. Be sure to give them a copy of the dealership’s privacy policy at that time.
6. Don’t share any credit report information with customers until they arrive at the dealership and present acceptable identification.
7. Mail customers a credit score disclosure within two days after pulling the credit report to comply with the federal Risk-Based Pricing Rule. Be sure to mail the disclosure to the current address shown on the credit report rather than the unverified address on the credit application.
8. Mail a copy of the dealership’s privacy policy to consumers who decided not to buy a vehicle.
9. Don’t mail the credit score disclosure if customers clearly withdraw their credit application.
10. Mail an adverse action notice if the dealership cannot obtain financing for the customer.